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      <div id=breadcrumb><a href="/index.html">Home</a> > <a href="/library/index.html">Library</a> > <a href="/library/sotu/index.html">State
      of the Union Address</a> &gt; John F. Kennedy  1962</div>
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    <h2> State of the Union Address
      <br> 
      John F. Kennedy </h2>
    <h3 align="left"> <br>
  11 January 1962</h3>
    <p>Mr. Vice President, my old colleague from Massachusetts and your new Speaker,
      John McCormack, Members of the 87th Congress, ladies and gentlemen: </p>
    <p>This week we begin anew our joint and separate efforts to build the American
      future. But, sadly, we build without a man who linked a long past with
      the present and looked strongly to the future. &quot;Mister Sam&quot; Rayburn
      is gone. Neither this House nor the Nation is the same without him. </p>
    <p>Members of the Congress, the Constitution makes us not rivals for power
      but partners for progress. We are all trustees for the American people,
      custodians of the American heritage. It is my task to report the State
      of the Union--to improve it is the task of us all. </p>
    <p>In the past year, I have traveled not only across our own land but to
      other lands-to the North and the South, and across the seas. And I have
      found--as I am sure you have, in your travels--that people everywhere,
      in spite of occasional disappointments, look to us--not to our wealth or
      power, but to the splendor of our ideals. For our Nation is commissioned
      by history to be either an observer of freedom's failure or the cause of
      its success. Our overriding obligation in the months ahead is to fulfill
      the world's hopes by fulfilling our own faith. </p>
    <p>1. STRENGTHENING THE ECONOMY </p>
    <p>That task must begin at home. For if we cannot fulfill our own ideals
      here, we cannot expect others to accept them. And when the youngest child
      alive today has grown to the cares of manhood, our position in the world
      will be determined first of all by what provisions we make today--for his
      education, his health, and his opportunities for a good home and a good
      job and a good life. </p>
    <p>At home, we began the year in the valley of recession--we completed it
      on the high road of recovery and growth. With the help of new congressionally
      approved or administratively increased stimulants to our economy, the number
      of major surplus labor u areas has declined from 101
      to 60; nonagricultural employment has increased by more than a million
      jobs; and the average factory work-week has risen to well over 40 hours.
      At year's end the economy which Mr. Khrushchev once called a &quot;stumbling
      horse&quot; was racing to new records in consumer spending, labor income,
      and industrial production. </p>
    <p>We are gratified--but we are not satisfied. Too many unemployed are still
      looking for the blessings of prosperity- As those who leave our schools
      and farms demand new jobs, automation takes old jobs away. To expand our
      growth and job opportunities, I urge on the Congress three measures: </p>
    <p>(1) First, the Manpower Training and Development Act, to stop the waste
      of able-bodied men and women who want to work, but whose only skill has
      been replaced by a machine, or moved with a mill, or shut down with a mine; </p>
    <p>(2) Second, the Youth Employment Opportunities Act, to help train and
      place not only the one million young Americans who are both out of school
      and out of work, but the twenty-six million young Americans entering the
      labor market in this decade; and </p>
    <p>(3) Third, the 8 percent tax credit for investment in machinery and equipment,
      which, combined with planned revisions of depreciation allowances, will
      spur our modernization, our growth, and our ability to compete abroad. </p>
    <p>Moreover--pleasant as it may be to bask in the warmth of recovery--let
      us not forget that we have suffered three recessions in the last 7 years.
      The time to repair the roof is when the sun is shining--by filling three
      basic gaps in our anti-recession protection. We need: </p>
    <p>(1) First, presidential standby authority, subject to congressional veto,
      to adjust personal income tax rates downward within a specified range and
      time, to slow down an economic decline before it has dragged us all down;<br>
  (2) Second, presidential standby authority, upon a given rise in the rate of
  unemployment, to accelerate Federal and federally-aided capital improvement
  programs; and </p>
    <p>(3) Third, a permanent strengthening of our unemployment compensation
      system--to maintain for our fellow citizens searching for a job who cannot
      find it, their purchasing power and their living standards without constant
      resort--as we have seen in recent years by the Congress and the administrations-to
      temporary supplements. </p>
    <p>If we enact this six-part program, we can show the whole world that a
      free economy need not be an unstable economy--that a free system need not
      leave men unemployed--and that a free society is not only the most productive
      but the most stable form of organization yet fashioned by man. </p>
    <p>II. FIGHTING INFLATION </p>
    <p>But recession is only one enemy of a free economy--inflation is another.
      Last year, 1961, despite rising production and demand, consumer prices
      held almost steady--and wholesale prices declined. This is the best record
      of overall price stability of any comparable period of recovery since the
      end of World War II. </p>
    <p>Inflation too often follows in the shadow of growth--while price stability
      is made easy by stagnation or controls. But we mean to maintain both stability
      and growth in a climate of freedom. </p>
    <p>Our first line of defense against inflation is the good sense and public
      spirit of business and labor--keeping their total increases in wages and
      profits in step with productivity. There is no single statistical test
      to guide each company and each union. But I strongly urge them--for their
      country's interest, and for their own--to apply the test of the public
      interest to these transactions. </p>
    <p> Within
      this same framework of growth and wage-price stability: </p>
    <p>--This administration has helped keep our economy competitive by widening
      the access of small business to credit and Government contracts, and by
      stepping up the drive against monopoly, price-fixing, and racketeering; </p>
    <p>--We will submit a Federal Pay Reform bill aimed at giving our classified,
      postal, and other employees new pay scales more comparable to those of
      private industry; </p>
    <p>--We are holding the fiscal 1962 budget deficit far below the level incurred
      after the last recession in 1958; and, finally, </p>
    <p>--I am submitting for fiscal 1963 a balanced Federal Budget. </p>
    <p> This
      is a joint responsibility, requiring Congressional cooperation on appropriations,
      and on three sources of income in particular: </p>
    <p>(1) First, an increase in postal rates, to end the postal deficit; </p>
    <p> (2)
      Secondly, passage of the tax reforms previously urged, to remove unwarranted
      tax preferences, and to apply to dividends and to interest the same withholding
      requirements we have long applied to wages; and </p>
    <p>(3) Third, extension of the present excise and corporation tax rates,
      except for those changes--which will be recommended in a message--affecting
      transportation. </p>
    <p>III. GETTING AMERICA MOVING </p>
    <p>But a stronger nation and economy require more than a balanced Budget.
      They require progress in those programs that spur our growth and fortify
      our strength. </p>
    <p>CITIES </p>
    <p>A strong America depends on its cities-America's glory, and sometimes
      America's shame. To substitute sunlight for congestion and progress for
      decay, we have stepped up existing urban renewal and housing programs,
      and launched new ones--redoubled the attack on water pollution--speeded
      aid to airports, hospitals, highways, and our declining mass transit systems--and
      secured new weapons to combat organized crime, racketeering, and youth
      delinquency, assisted by the coordinated and hard-hitting efforts of our
      investigative services: the FBI, the Internal Revenue, the Bureau of Narcotics,
      and many others. We shall need further anti-crime, mass transit, and transportation
      legislation--and new tools to fight air pollution. And with all this effort
      under way, both equity and commonsense require that our nation's urban
      areas--containing three-fourths of our population--sit as equals at the
      Cabinet table. I urge a new Department of Urban Affairs and Housing. </p>
    <p>AGRICULTURE AND RESOURCES </p>
    <p>A strong America also depends on its farms and natural resources. American
      farmers took heart in 1961--from a billion dollar rise in farm income--and
      from a hopeful start on reducing the farm surpluses. But we are still operating
      under a patchwork accumulation of old laws, which cost us $1 billion a
      year in CCC carrying charges alone, yet fail to halt rural poverty or boost
      farm earnings. </p>
    <p>Our task is to master and turn to fully fruitful ends the magnificent
      productivity of our farms and farmers. The revolution on our own countryside
      stands in the sharpest contrast to the repeated farm failures of the Communist
      nations and is a source of pride to us all. Since 1950 our agricultural
      output per man-hour has actually doubled! Without new, realistic measures,
      it will someday swamp our farmers and our taxpayers in a national scandal
      or a farm depression. </p>
    <p>I will, therefore, submit to the Congress a new comprehensive farm program--tailored
      to fit the use of our land and the supplies of each crop to the long-range
      needs of the sixties--and designed to prevent chaos in the sixties with
      a program of commonsense. </p>
    <p>We also need for the sixties--if we are to bequeath our full national
      estate to our heirs--a new long-range conservation and recreation program--expansion
      of our superb national parks and forests--preservation of our authentic
      wilderness areas-new starts on water and power projects as our population
      steadily increases--and expanded REA generation and transmission loans. </p>
    <p>CIVIL RIGHTS </p>
    <p>But America stands for progress in human rights as well as economic affairs,
      and a strong America requires the assurance of full and equal rights to
      all its citizens, of any race or of any color. This administration has
      shown as never before how much could be done through the full use of Executive
      powers--through the enforcement of laws already passed by the Congress-through
      persuasion, negotiation, and litigation, to secure the constitutional rights
      of all: the right to vote, the right to travel Without hindrance across
      State lines, and the right to free public education. </p>
    <p>I issued last March a comprehensive order to guarantee the right to equal
      employment opportunity in all Federal agencies and contractors. The Vice
      President's Committee thus created has done much, including the voluntary &quot;Plans
      for progress&quot; which, in all sections of the country, are achieving
      a quiet but striking success in opening up to all races new professional,
      supervisory, and other job opportunities. </p>
    <p>But there is much more to be done--by the Executive, by the courts, and
      by the Congress. Among the bills now pending before you, on which the executive
      departments will comment in detail, are appropriate methods of strengthening
      these basic rights which have our full support. The right to vote, for
      example, should no longer be denied through such arbitrary devices on a
      local level, sometimes abused, such as literacy tests and poll taxes. As
      we approach the 100th anniversary, next January, of the Emancipation Proclamation,
      let the acts of every branch of the Government--and every citizen--portray
      that &quot;righteousness does exalt a nation.&quot; </p>
    <p>HEALTH AND WELFARE </p>
    <p>Finally, a strong America cannot neglect the aspirations of its
      citizens--the welfare of the needy, the health care of the elderly, the
      education of the young. For we are not developing the Nation's wealth for
      its own sake. Wealth is the means--and people arc the ends. All our material
      riches will avail us little if we do not use them to expand the opportunities
      of our people. </p>
    <p>Last year, we improved the diet of needy people--provided more hot lunches
      and fresh milk to school children built more college dormitories--and,
      for the elderly, expanded private housing, nursing homes, heath services,
      and social security. But we have just begun. </p>
    <p>To help those least fortunate of all, I am recommending a new public welfare
      program, stressing services instead of support, rehabilitation instead
      of relief, and training for useful work instead of prolonged dependency. </p>
    <p>To relieve the critical shortage of doctors and dentists--and this is
      a matter which should concern us all--and expand research, I urge action
      to aid medical and dental colleges and scholarships and to establish new
      National Institutes of Health. </p>
    <p>To take advantage of modern vaccination achievements, I am proposing a
      mass immunization program, aimed at the virtual elimination of such ancient
      enemies of our children as polio, diphtheria, whooping cough, and tetanus. </p>
    <p>To protect our consumers from the careless and the unscrupulous, I shall
      recommend improvements in the Food and Drug laws-strengthening inspection
      and standards, halting unsafe and worthless products, preventing misleading
      labels, and cracking down on the illicit sale of habit-forming drugs. </p>
    <p>But in matters of health, no piece of unfinished business is more
      important or more urgent than the enactment under the social security system
      of health insurance for the aged. </p>
    <p>For our older citizens have longer and more frequent illnesses,
      higher hospital and medical bills and too little income to pay them. Private
      health insurance helps very few--for its cost is high and its coverage
      limited. Public welfare cannot help those too proud to seek relief but
      hard-pressed to pay their own bills. Nor can their children or grandchildren
      always sacrifice their own health budgets to meet this constant drain. </p>
    <p>Social security has long helped to meet the hardships of retirement, death,
      and disability. I now urge that its coverage be extended without further
      delay to provide health insurance for the elderly. </p>
    <p>EDUCATION </p>
    <p>Equally important to our strength is the quality of our education. Eight
      million adult Americans are classified as functionally illiterate. This
      is a disturbing figure--reflected in Selective Service rejection rates-reflected
      in welfare rolls and crime rates. And I shall recommend plans for a massive
      attack to end this adult illiteracy. </p>
    <p>I shall also recommend bills to improve educational quality, to stimulate
      the arts, and, at the college level, to provide Federal loans for the construction
      of academic facilities and federally financed scholarships. </p>
    <p>If this Nation is to grow in wisdom and strength, then every able high
      school graduate should have the opportunity to develop his talents. Yet
      nearly half lack either the funds or the facilities to attend college.
      Enrollments are going to double in our colleges in the short space of 10
      years. The annual cost per student is skyrocketing to astronomical levels--now
      averaging $1,650 a year, although almost half of our families earn less
      than $5,000. They cannot afford such costs--but this Nation cannot afford
      to maintain its military power and neglect its brainpower. </p>
    <p>But excellence in education must begin at the elementary level. I sent
      to the Congress last year a proposal for Federal aid to public school construction
      and teachers' salaries. I believe that bill, which passed the Senate and
      received House Committee approval, offered the minimum amount required
      by our needs and--in terms of across-the-board aid--the maximum scope permitted
      by our Constitution. I therefore see no reason to weaken or withdraw that
      bill: and I urge its passage at this session. </p>
    <p>&quot;Civilization,&quot; said H. G. Wells, &quot;is a race between education
      and catastrophe.&quot; It is up to you in this Congress to determine the
      winner of that race. </p>
    <p>These are not unrelated measures addressed to specific gaps or grievances
      in our national life. They are the pattern of our intentions and the foundation
      of our hopes. &quot;I believe in democracy,&quot; said Woodrow Wilson, &quot;because
      it releases the energy of every human being.&quot; The dynamic of democracy
      is the power and the purpose of the individual, and the policy of this
      administration is to give to the individual the opportunity to realize
      his own highest possibilities. </p>
    <p>Our program is to open to all the opportunity for steady and productive
      employment, to remove from all the handicap of arbitrary or irrational
      exclusion, to offer to all the facilities for education and health and
      welfare, to make society the servant of the individual and the individual
      the source of progress, and thus to realize for all the full promise of
      American life. </p>
    <p>IV. OUR GOALS ABROAD </p>
    <p>All of these efforts at home give meaning to our efforts abroad. Since
      the close of the Second World War, a global civil war has divided and tormented
      mankind. But it is not our military might, or our higher standard of living,
      that has most distinguished us from our adversaries. It is our belief that
      the state is the servant of the citizen and not his master. </p>
    <p>This basic clash of ideas and wills is but one of the forces reshaping
      our globe--swept as it is by the tides of hope and fear, by crises in the
      headlines today that become mere footnotes tomorrow. Both the successes
      and the setbacks of the past year remain on our agenda of unfinished business.
      For every apparent blessing contains the seeds of danger--every area of
      trouble gives out a ray of hope--and the one unchangeable certainty is
      that nothing is certain or unchangeable. </p>
    <p>Yet our basic goal remains the same: a peaceful world community
      of free and independent states--free to choose their own future and their
      own system, so long as it does not threaten the freedom of others.<br>
  Some may choose forms and ways that we would not choose for ourselves--but
  it is not for us that they are choosing. We can welcome diversity--the Communists
  cannot. For we offer a world of choice--they offer the world of coercion. And
  the way of the past shows dearly that freedom, not coercion, is the wave of
  the future. At times our goal has been obscured by crisis or endangered by
  conflict--but it draws sustenance from five basic sources of strength:<br>
  --the moral and physical strength of the United States;<br>
  --the united strength of the Atlantic Community;<br>
  --the regional strength of our Hemispheric relations;<br>
  --the creative strength of our efforts in the new and developing nations; and<br>
  --the peace-keeping strength of the United Nations. </p>
    <p>V. OUR MILITARY STRENGTH </p>
    <p>Our moral and physical strength begins at home as already discussed. But
      it includes our military strength as well. So long as fanaticism and fear
      brood over the affairs of men, we must arm to deter others from aggression. </p>
    <p>In the past 12 months our military posture has steadily improved. We increased
      the previous defense budget by 15 percent--not in the expectation of war
      but for the preservation of peace. We more than doubled our acquisition
      rate of Polaris submarines--we doubled the production capacity for Minuteman
      missiles--and increased by 50 percent the number of manned bombers standing
      ready on a 15 minute alert. This year the combined force levels planned
      under our new Defense budget--including nearly three hundred additional
      Polaris and Minuteman missiles--have been precisely calculated to insure
      the continuing strength of our nuclear deterrent. </p>
    <p>But our strength may be tested at many levels. We intend to have at all
      times the capacity to resist non-nuclear or limited attacks--as a complement
      to our nuclear capacity, not as a substitute. We have rejected any all-or-nothing
      posture which would leave no choice but inglorious retreat or unlimited
      retaliation. </p>
    <p>Thus we have doubled the number of ready combat divisions in the Army's
      strategic reserve--increased our troops in Europe--built up the Marines--added
      new sealift and airlift capacity--modernized our weapons and ammunition--expanded
      our anti-guerrilla forces--and increased the active fleet by more than
      70 vessels and our tactical air forces by nearly a dozen wings. </p>
    <p>Because we needed to reach this higher long-term level of readiness more
      quickly, 155,000 members of the Reserve and National Guard were activated
      under the Act of this Congress. Some disruptions and distress were inevitable.
      But the overwhelming majority bear their burdens--and their Nation's burdens--with
      admirable and traditional devotion. </p>
    <p>In the coming year, our reserve programs will be revised--two Army Divisions
      will, I hope, replace those Guard Divisions on duty--and substantial other
      increases will boost our Air Force fighter units, the procurement of equipment,
      and our continental defense and warning efforts. The Nation's first serious
      civil defense shelter program is under way, identifying, marking, and stocking
      50 million spaces; and I urge your approval of Federal incentives for the
      construction of public fall-out shelters in schools and hospitals and similar
      centers. </p>
    <p>VI. THE UNITED NATIONS </p>
    <p>But arms alone are not enough to keep the peace--it must be kept by men.
      Our instrument and our hope is the United Nations-and I see little merit
      in the impatience of those who would abandon this imperfect world instrument
      because they dislike our imperfect world. For the troubles of a world organization
      merely reflect the troubles of the world itself. And if the organization
      is weakened, these troubles can only increase. We may not always agree
      with every detailed action taken by every officer of the United Nations,
      or with every voting majority. But as an institution, it should have in
      the future, as it has had in the past since its inception, no stronger
      or more faithful member than the United States of America. </p>
    <p>In 1961 the peace-keeping strength of the United Nations was reinforced.
      And those who preferred or predicted its demise, envisioning a troika in
      the seat of Hammarskiold--or Red China inside the Assembly-have seen instead
      a new vigor, under a new Secretary General and a fully independent Secretariat.
      In making plans for a new forum and principles on disarmament for peace-keeping
      in outer space--for a decade of development effort--the UN fulfilled its
      Charter's lofty aim. </p>
    <p>Eighteen months ago the tangled and turbulent Congo presented the UN with
      its gravest challenge. The prospect was one of chaos--or certain big-power
      confrontation, with all of its hazards and all of its risks, to us and
      to others. Today the hopes have improved for peaceful conciliation within
      a united Congo. This is the objective of our policy in this important area. </p>
    <p>No policeman is universally popular-particularly when he uses his stick
      to restore law and order on his beat. Those members who are willing to
      contribute their votes and their views--but very little else--have created
      a serious deficit by refusing to pay their share of special UN assessments.
      Yet they do pay their annual assessments to retain their votes--and a new
      UN Bond issue, financing special operations for the next 18 months, is
      to be repaid with interest from these regular assessments. This is clearly
      in our interest. It will not only keep the UN solvent, but require all
      voting members to pay their fair share of its activities. Our share of
      special operations has long been much higher than our share of the annual
      assessment--and the bond issue will in effect reduce our disproportionate
      obligation, and for these reasons, I am urging Congress to approve our
      participation. </p>
    <p>With the approval of this Congress, we have undertaken in the past year
      a great new effort in outer space. Our aim is not simply to be first on
      the moon, any more than Charles Lindbergh's real aim was to be the first
      to Paris. His aim was to develop the techniques of our own country and
      other countries in the field of air and the atmosphere, and our objective
      in making this effort, which we hope will place one of our citizens on
      the moon, is to develop in a new frontier of science, commerce and cooperation,
      the position of the United States and the Free World. </p>
    <p>This Nation belongs among the first to explore it, and among the first--if
      not the first--we shall be. We are offering our know-how and our
      cooperation to the United Nations. Our satellites will soon
      be providing other nations with improved weather observations. And I shall
      soon send to the Congress a measure to govern the financing and operation
      of an International Communications Satellite system, in a manner consistent
      with the public interest and our foreign policy. </p>
    <p>But peace in space will help us naught once peace on earth is gone. World
      order will be secured only when the whole world has laid down these weapons
      which seem to offer us present security but threaten the future survival
      of the human race. That armistice day seems very far away. The vast resources
      of this planet are being devoted more and more to the means of destroying,
      instead of enriching, human life. </p>
    <p>But the world was not meant to be a prison in which man awaits his execution.
      Nor has mankind survived the tests and trials of thousands of years to
      surrender everything-including its existence--now. This Nation has the
      will and the faith to make a supreme effort to break the log jam on disarmament
      and nuclear tests--and we will persist until we prevail, until the rule
      of law has replaced the ever dangerous use of force. </p>
    <p>VII. LATIN AMERICA </p>
    <p>I turn now to a prospect of great promise: our Hemispheric relations.
      The Alliance for Progress is being rapidly transformed from proposal to
      program. Last month in Latin America I saw for myself the quickening of
      hope, the revival of confidence, the new trust in our country--among workers
      and farmers as well as diplomats. We have pledged our help in speeding
      their economic, educational, and social progress. The Latin American Republics
      have in turn pledged a new and strenuous effort of self-help and self-reform. </p>
    <p>To support this historic undertaking, I am proposing--under the authority
      contained in the bills of the last session of the Congress--a special long-term
      Alliance for Progress fund of $3 billion. Combined with our Food for Peace,
      Export-Import Bank, and other resources, this will provide more than $1
      billion a year in new support for the Alliance. In addition, we have increased
      twelve-fold our Spanish and Portuguese language broadcasting in Latin America,
      .and improved Hemispheric trade and defense. And while the blight of communism
      has been increasingly exposed and isolated in the Americas, liberty has
      scored a gain. The people of the Dominican Republic, with our firm encouragement
      and help, and those of our sister Republics of this Hemisphere are safely
      passing through the treacherous course from dictatorship through disorder
      towards democracy. </p>
    <p>VIII. THE NEW AND DEVELOPING NATIONS </p>
    <p>Our efforts to help other new or developing nations, and to strengthen
      their stand for freedom, have also made progress. A newly unified Agency
      for International Development is reorienting our foreign assistance to
      emphasize long-term development loans instead of grants, more economic
      aid instead of military, individual plans to meet the individual needs
      of the nations, and new standards on what they must do to marshal their
      own resources. </p>
    <p>A newly conceived Peace Corps is winning friends and helping people in
      fourteen countries--supplying trained and dedicated young men and women,
      to give these new nations a hand in building a society, and a glimpse of
      the best that is in our country. If there is a problem here, it is that
      we cannot supply the spontaneous and mounting demand. </p>
    <p>A newly-expanded Food for Peace Pro-. gram is feeding the hungry of many
      lands with the abundance of our productive farms--providing lunches for
      children in school, wages for economic development, relief for the victims
      of flood and famine, and a better diet for millions whose daily bread is
      their chief concern. </p>
    <p>These programs help people; and, by helping people, they help freedom.
      The views of their governments may sometimes be very different from ours--but
      events in Africa, the Middle East, and Eastern Europe teach us never to
      write off any nation as lost to the Communists- That is the lesson of our
      time. We support the independence of those newer or weaker states whose
      history, geography, economy or lack of power impels them to remain outside &quot;entangling
      alliances&quot;--as we did for more than a century. For the independence
      of nations is a bar to the Communists' &quot;grand design&quot;-it is the
      basis of our own. </p>
    <p>In the past year, for example, we have urged a neutral and independent
      Laos-regained there a common policy with our major allies--and insisted
      that a cease-fire precede negotiations. While a workable formula for supervising
      its independence is still to be achieved, both the spread of war-which
      might have involved this country also--and a Communist occupation have
      thus far been prevented. </p>
    <p>A satisfactory settlement in Laos would also help to achieve and safeguard
      the peace in Viet-Nam--where the foe is increasing his tactics of terror--where
      our own efforts have been stepped up--and where the local government has
      initiated new programs and reforms to broaden the base of resistance. The
      systematic aggression now bleeding that country is not a &quot;war of liberation&quot;--for
      Viet-Nam is already free. It is a war of attempted subjugation--and it
      will be resisted. </p>
    <p>IX. THE ATLANTIC COMMUNITY </p>
    <p>Finally, the united strength of the Atlantic Community has flourished
      in the last year under severe tests. NATO has increased both the number
      and the readiness of its air, ground, and naval units--both its nuclear
      and non-nuclear capabilities. Even greater efforts by all its members are
      still required. Nevertheless our unity of purpose and will has been, I
      believe, immeasurably strengthened. </p>
    <p>The threat to the brave city of Berlin remains. In these last 6 months
      the Allies have made it unmistakably clear that our presence in Berlin,
      our free access thereto, and the freedom of two million West Berliners
      would not be surrendered either to force or through appeasement--and to
      maintain those rights and obligations, we are prepared to talk, when appropriate,
      and to fight, if necessary. Every member of NATO stands with us in a common
      commitment to preserve this symbol of free man's will to remain free. </p>
    <p>I cannot now predict the course of future negotiations over Berlin. I
      can only say that we are sparing no honorable effort to find a peaceful
      and mutually acceptable resolution of this problem. I believe such a resolution
      can be found, and with it an improvement in our relations with the Soviet
      Union, if only the leaders in the Kremlin will recognize the basic rights
      and interests involved, and the interest of all mankind in peace. </p>
    <p>But the Atlantic Community is no longer concerned with purely military
      aims. As its common undertakings grow at an ever-increasing pace, we are,
      and increasingly will be, partners in aid, trade, defense, diplomacy, and
      monetary affairs. </p>
    <p>The emergence of the new Europe is being matched by the emergence of new
      ties across the Atlantic. It is a matter of undramatic daily cooperation
      in hundreds of workaday tasks: of currencies kept in effective relation,
      of development loans meshed together, of standardized weapons, and concerted
      diplomatic positions. The Atlantic Community grows, not like a volcanic
      mountain, by one mighty explosion, but like a coral reef, from the accumulating
      activity of all. </p>
    <p>Thus, we in the free world are moving steadily toward unity and cooperation,
      in the teeth of that old Bolshevik prophecy, and at the very time when
      extraordinary rumbles of discord can be heard across the Iron Curtain.
      It is not free societies which bear within them the seeds of inevitable
      disunity. </p>
    <p>X. OUR BALANCE OF PAYMENTS </p>
    <p>On one special problem, of great concern to our friends, and to us, I
      am proud to give the Congress an encouraging report. Our efforts to safeguard
      the dollar are progressing. In the 11 months preceding last February
      1, we suffered a net loss of nearly $2 billion in gold. In the 11 months
      that followed, the loss was just over half a billion dollars. And our deficit
      in our basic transactions with the rest of the world--trade, defense, foreign
      aid, and capital, excluding volatile short-term flows--has been reduced
      from $2 billion for 1960 to about one-third that amount for 1961. Speculative
      fever against the dollar is ending--and confidence in the dollar has been
      restored. </p>
    <p>We did not--and could not--achieve these gains through import restrictions,
      troop withdrawals, exchange controls, dollar devaluation or choking off
      domestic recovery. We acted not in panic but in perspective. But the problem
      is not yet solved. Persistently large deficits would endanger our economic
      growth and our military and defense commitments abroad. Our goal must be
      a reasonable equilibrium in our balance of payments. With the cooperation
      of the Congress, business, labor, and our major allies, that goal can be
      reached. </p>
    <p>We shall continue to attract foreign tourists and investments to our shores,
      to seek increased military purchases here by our allies, to maximize foreign
      aid procurement from American firms, to urge increased aid from other fortunate
      nations to the less fortunate, to seek tax laws which do not favor investment
      in other industrialized nations or tax havens, and to urge coordination
      of allied fiscal and monetary policies So as to discourage large and disturbing
      capital movements. </p>
    <p>TRADE </p>
    <p>Above all, if we are to pay for our commitments abroad, we must expand
      our exports. Our businessmen must be export conscious and export competitive.
      Our tax policies must spur modernization of our plants--our wage and price
      gains must be consistent with productivity to hold the line on prices--our
      export credit and promotion campaigns for American industries must continue
      to expand. </p>
    <p>But the greatest challenge of all is posed by the growth of the European
      Common Market. Assuming the accession of the United Kingdom, there will
      arise across the Atlantic a trading partner behind a single external tariff
      similar to ours with an economy which nearly equals our own. Will we in
      this country adapt our thinking to these new prospects and patterns--or
      will we wait until events have passed us by? </p>
    <p>This is the year to decide. The Reciprocal Trade Act is expiring. We need
      a new law--a wholly new approach--a bold new instrument of American trade
      policy. Our decision could well affect the unity of the West, the course
      of the Cold War, and the economic growth of our Nation for a generation
      to come. </p>
    <p>If we move decisively, our factories and farms can increase their sales
      to their richest, fastest-growing market. Our exports will increase. Our
      balance of payments position will improve. And we will have forged across
      the Atlantic a trading partnership with vast resources for freedom. </p>
    <p>If, on the other hand, we hang back in deference to local economic pressures,
      we will find ourselves cut off from our major allies. Industries--and I
      believe this is most vital--industries will move their plants and jobs
      and capital inside the walls of the Common Market, and jobs, therefore,
      will be lost here in the United States if they cannot otherwise compete
      for its consumers. Our farm surpluses--our balance of trade, as you all
      know, to Europe, the Common Market, in farm products, is nearly three or
      four to one in our favor, amounting to one of the best earners of dollars
      in our balance of payments structure, and without entrance to this Market,
      without the ability to enter it, our farm surpluses will pile up in the
      Middle West, tobacco in the South, and other commodities, which have gone
      through Western Europe for 15 years. Our balance of payments position will
      worsen. Our consumers, will lack a wider choice of goods at lower prices.
      And millions of American workers-whose jobs depend on the sale or the transportation
      or the distribution of exports or imports, or whose jobs will be endangered
      by the movement of our capital to Europe, or whose jobs can be maintained
      only in. an expanding economy--these millions of workers in your home States
      and mine will see their real interests sacrificed. </p>
    <p>Members of the Congress: The United States did not rise to greatness by
      waiting for others to lead. This Nation is the world's foremost manufacturer,
      farmer, banker, consumer, and exporter. The Common Market is moving ahead
      at an economic growth rate twice ours. The Communist economic offensive
      is under way. The opportunity is ours--the initiative is up to us--and
      I believe that 1962 is the time. </p>
    <p>To seize that initiative, I shall shortly send to the Congress a new five-year
      Trade Expansion Action, far-reaching in scope but designed with great care
      to make certain that its benefits to our people far outweigh any risks.
      The bill will permit the gradual elimination of tariffs here in the United
      States and in the Common Market on those items in which we together supply
      80 percent of the world's trade--mostly items in which our own ability
      to compete is demonstrated by the fact that we sell abroad, in these items,
      substantially more than we import. This step will make it possible for
      our major industries to compete with their counterparts in Western Europe
      for access to European consumers. </p>
    <p>On other goods the bill will permit a gradual reduction of duties up to
      50 percent-permitting bargaining by major categories-and provide for appropriate
      and tested forms of assistance to firms and employees adjusting to import
      competition. We are not neglecting the safeguards provided by peril points,
      an escape clause, or the National Security Amendment. Nor are we abandoning
      our non-European friends or our traditional &quot;most-favored nation&quot; principle.
      On the contrary, the bill will provide new encouragement for their sale
      of tropical agricultural products, so important to our friends in Latin
      America, who have long depended upon the European market, who now find
      themselves faced with new challenges which we must join with them in overcoming. </p>
    <p>Concessions, in this bargaining, must of course be reciprocal, not unilateral.
      The Common Market will not fulfill its own high promise unless its outside
      tariff walls are low. The dangers of restriction or timidity in our own
      policy have counterparts for our friends in Europe. For together we face
      a common challenge: to enlarge the prosperity of free men everywhere--to
      build in partnership a new trading community in which all free nations
      may gain from the productive energy of free competitive effort. </p>
    <p>These various elements in our foreign policy lead, as I have said, to
      a single goal--the goal of a peaceful world of free and independent states.
      This is our guide for the present and our vision for the future--a free
      community of nations, independent but interdependent, uniting north and
      south, east and west, in one great family of man, outgrowing and transcending
      the hates and fears that rend our age. </p>
    <p>We will not reach that goal today, or tomorrow. We may not reach it in
      our own lifetime. But the quest is the greatest adventure of our century.
      We sometimes chafe at the burden of our obligations, the complexity of
      our decisions, the agony of our choices. But there is no comfort or security
      for us in evasion, no solution in abdication, no relief in irresponsibility. </p>
    <p>A year ago, in assuming the tasks of the Presidency, I said that few generations,
      in all history, had been granted the role of being the great defender of
      freedom in its hour of maximum danger. This is our good fortune; and I
      welcome it now as I did a year ago. For it is the fate of this generation-of
      you in the Congress and of me as President--to live with a struggle we
      did not start, in a world we did not make. But the pressures of life are
      not always distributed by choice. And while no nation has ever faced such
      a challenge, no nation has ever been so ready to seize the burden and the
      glory of freedom. </p>
    <p> And
      in this high endeavor, may God watch over the United States of America. </p>
      </div>
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